Amazon’s efforts to generate revenue through its Alexa-enabled devices have reportedly backfired, leading to significant financial losses for the company. Between 2017 and 2021, Amazon lost over $25 billion related to its Echo, Kindle, and other gadget initiatives, according to internal documents cited by the Wall Street Journal.
While the company boasts hundreds of millions of users for its devices, it appears that Alexa-enabled Echo speakers are predominantly used for basic functions like setting alarms, rather than facilitating shopping on Amazon.
A former senior Amazon employee expressed concerns about the workforce investment, noting, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these challenges, Amazon CEO Andy Jassy is reportedly working on a solution, including the introduction of a paid version of Alexa. However, some engineers at Amazon are skeptical about the potential effectiveness of this new offering.
An Amazon representative stated, “We’re focused on the value we create when customers use our services, not just when they buy our devices.” The spokesperson emphasized that the Devices & Services division has established several profitable businesses and is poised for future success.
Additionally, Amazon’s newly revealed artificial intelligence-supported version of Alexa is reportedly not ready for deployment, according to some former employees. Insufficient data and a lack of necessary hardware to support the advanced language model have been cited as challenges. Recent reports suggest that Amazon has shifted its focus toward developing generative AI for its cloud computing sector, Amazon Web Services.
Amazon has refuted claims made by former employees, asserting that they are misinformed regarding the current state of its AI initiatives and that the Amazon Artificial General Intelligence team has access to the requisite chips to support its plans, with a continued commitment to developing “the world’s best personal assistant.”